What Is Top Up FD? How To Add & Grow Money in FD
Table of Contents
Fixed deposits are considered the safest investment option for investors because they give a secure and steady return. Fixed deposits are a type of investment plans in which individuals invest a lump sum amount for a specified period and get interest on that amount in return. Now FD has special features in which an individual can add more to their investment.
About Top Up FD
Top Up in FD is the additional deposit facilities offered by the bank and financial institution to the existing customers of FD holders. It allows investors to add extra funds to their existing FD account, thereby it helps in increasing their savings and potentially earning higher interest on the added amount.
What Are Some of The Features of Top Up FD?
Assume that a person has a fixed deposit in any bank for the amount of 2,00,000 on an interest rate of 7% annually for a tenure of 2 years. Let’s now look at the impact of the same with a top up FD below:
|
Assume that a customer has an investment of 2,00,000 |
Case 1 Suppose that a customer opts for a top up of 10,000 at the end of 2 years |
Case 2 Suppose that a customer opts for a top up of 30,000 |
Case 3 Suppose that a customer does not opt for a top up |
|
|
Investment Amount |
2,00,000 |
2,38,000 |
2,58,000 |
2,28,000 |
|
Tenure |
2 years |
2 years |
2 years |
2 years |
|
Rate of Investment |
7% |
7% |
7% |
7% |
|
Interest Earned |
28,000 |
33,320 |
36,120 |
31,920 |
|
Maturity Amount |
2,28,000 |
2,71,320 |
2,94,120 |
2,59,920 |
- Suppose that a customer has an FD of 2,00,000 for the tenure of 2 years on an interest rate of 7% annually.
- Customers have the option to renew the FD and another option is to do Top Up by adding extra funds in his/her FD.
- To clear the doubt on Top Up features we have created three cases in which the first two cases of Top Up features have been explained which the first case has a smaller amount and the second case has a bigger amount.
- The last case, which is case 3, is made to explain what will happen when there will be no Top Up feature added to the investment.
- From the above case which is created, we came to know that if the Top up is done in the FD then in case 1 the maturity amount will be 2,71,320 and in case 2 the amount will be 2,94,120.
Benefits of Top Up FD
Flexibility - There is no limit to the amount that is to be added in FD as a Top Up so an individual can choose the amount as per their need and ability.
Higher Return - One can choose Top Up features in FD during the time of renewal with the new rate of interest to earn a high return on investment.
Easy to Opts - In this growing technology adding Top Up has become easy by doing some steps on the internet banking by visiting bank websites.
Is Top Up FD Good Or Not?
Yes, Top Up FD is definitely a good option for individuals who have a surplus amount of money and want to increase their investment, so they can add that money to their existing FD account and earn extra interest on those investments. It is considered as a safe investment because of its secure and steady return on investment.
FAQs
Ques1. What is the period in which the Top Up feature can be availed?
Ans. An individual can avail Top Up feature within 30 days before the maturity date of investment.
Ques 2. Is there any limit to adding money to the Top Up feature of FD?
Ans. No, there is no limit in adding money to the Top Up feature of FD.
Ques 3. How to add money to the FD under the Top Up feature?
Ans. One can visit the bank and do the procedure stated by the bank employee and on the other hand with the help of Internet banking it can be done.
